Meeting a variety of investment needs in a single package, the Symmetry Portfolios follow the best practices of leading pension and sovereign wealth funds

By: DAVID ISRAELSON

Date: December 1, 2016

For investors in today’s complex global economy and a low-yield environment, the choices can be overwhelming. That’s why managed assets are worth considering, Alain Bergeron says.

“Managed assets are designed to provide a complete solution,” explains Mr. Bergeron, senior vice-president, investment management, and head of the asset allocation team at Mackenzie Investments in Toronto. These offerings are a reliable way to streamline the investment decision-making process for clients and their advisors.

“The portfolios are diversified across a number of criteria – by asset class, geography, currency and economic exposures,” Mr. Bergeron says.

By choosing Symmetry, clients and advisors gain access to an investment team with deep experience in institutional pension management. Team members apply rigorous research to allocate capital optimally along a variety of dimensions and use sophisticated tools to manage risk responsibly.

Mr. Bergeron’s own experience includes ten years managing portfolios at the Canada Pension Plan Investment Board (CPPIB). Among the other members of the Symmetry team is chief economist and strategist Todd Mattina, an alumnus of the International Monetary Fund as well as the CPPIB.

Canadians sometimes wonder about the value of seeking professional investment advice, but studies show that enlisting a financial advisor can make a positive, measurable difference to an investor’s results, Mr. Bergeron notes.

Henri-Paul Rousseau, vice-chairman of Power Corp. of Canada, made this case in remarks to the Canadian Club of Toronto last year.

Mr. Rousseau cited research by Claude Montmarquette, a fellow at CIRANO, the Montreal-headquartered Centre for Interuniversity Research and Analysis of Organizations, who found that households engaging an advisor for 15 years or longer accumulated 2.73 times more assets than those without one.

“That difference in outcomes is not explained by better returns, but is fully a result of improved savings discipline due to the advisor,” Mr. Rousseau said.

Many advisors themselves find managed asset products an effective way to get the most benefit for their clients, Mr. Bergeron asserts.

“The complexity associated with offering asset allocation and risk management best practices has increased significantly over the last few years,” he says. “It’s hard for a single person to replicate the sophistication of well-managed solutions. It can only be done by a dedicated team of experienced investors with the relevant but expensive supporting technology.

“Trying to do it on your own is like trying to build a computer yourself using components,” Mr. Bergeron adds. “A managed solution is like picking up a tablet that has all the capabilities in one package, optimized to fit together.”

Turning to the dedicated asset allocation teams also allows advisors to spend more time with their clients, Mr. Bergeron observes. The time saved on doing investment research can be used to work more closely with clients on financial planning and tax strategies.

When it comes to asset allocation, a good managed asset solution should operate like the best and biggest pension funds, sovereign wealth funds and endowments, according to Mr. Bergeron.

“First, you need an investment team that’s truly dedicated to the portfolio, with experience at globally recognized institutions that are known for doing advanced work in asset allocation and risk management,” he says.

Second, the team should have access to technology that support its sophisticated work. This is particularly relevant when managing complex, multi-asset-class portfolios, to prevent risk concentration from arising unintentionally.

Third, managed solutions should have flexible building blocks. “To me, that means the ability to hire managers from within the [financial] organization as well as outside. And it means the ability to customize the investment mandates, and choose from both active and passive mandates,” Mr. Bergeron says.

“In Symmetry, we rarely invest in regular mutual funds. Most of our investments are customized, designed specifically for us.”

Symmetry uses an enhanced tactical asset allocation process designed to drive extra returns. For the view generation and portfolio construction, up to 20 different decision-making models come into play across asset classes, geographical locations and currencies. Equity and fixed-income managers within and outside Mackenzie complement Symmetry’s own proven investment team.

Investors who want to know if a managed solution is right for them should ask an advisor first and foremost if the portfolio aligns with their goals and falls within their risk tolerance.

Mr. Bergeron also recommends discussing the tax considerations of an investment. For example, versions of Symmetry offer attractive tax features. “Clients will want to know if their investment provides them with the true diversification they need and if the fees are appropriate,” Mr. Bergeron says. “They’ll also want to know if the risk is monitored in real time. They’ll want risk concentration to be avoided.”

In both cases, managed solutions offerings vary widely in quality. “Symmetry’s portfolios are laser-focused on these activities,” Mr. Bergeron maintains.

Fine-tuning by Symmetry’s team and third-party managers makes Mackenzie’s portfolios more than a simplistic aggregation of funds, he concludes.

“A managed portfolio is like a symphony – a sophisticated suite of best practices to maximize the chances of financial success in the long run,” Mr. Bergeron says. “You need a good conductor, but you also need the right mix of instruments, and everyone has to start at the right time. If you orchestrate it well, you have a nice piece.”

Sponsored by Mackenzie Investments

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